Citigroup reported Wednesday a sharp drop in its first-quarter profit as the bank built its loan-loss reserves to cushion the blow from the coronavirus outbreak on its business.
Here's how the company did in the first quarter:
The company noted that revenue was up 12% because of higher fixed-income and equity trading. Revenue from the bank's fixed-income trading division surged 39% year over year to $4.8 billion. That's well above a StreetAccount estimate of $3.99 billion. Equity-trading revenue also jumped 39% to $1.2 billion, surpassing an estimate of $1.04 billion.
Citigroup shares fell 5.6%.
Wall Street had anticipated earnings per share of $1.04 on revenue of $19 billion based on Refinitiv consensus estimates.
"Our earnings for the first quarter were significantly impacted by the COVID-19 pandemic," CEO Michael Corbat said in a statement. "The deteriorating economic outlook and the transition to the new Current Expected Credit Loss standard (CECL) caused us to build significant loan loss reserves."
The bank's consumer banking division posted a net loss of $754 million for the quarter. In the year-earlier period, consumer banking had a net income of $1.3 billion. On a regional basis, consumer banking in Latin America saw a 13% drop in revenue from the previous quarter while Asia sales declined by 4%. North American revenue for consumer banking dipped 1% on a quarter-over-quarter basis.
Citigroup shares have tumbled more than 46% as investors grapple with the economic ramifications of the coronavirus outbreak.
The pandemic led to a virtual shutdown of the global economy as governments urge people to stay at home. It also led to unprecedented stimulus from the Federal Reserve and U.S. lawmakers to stem the economic fallout.
Citigroup said last month it would give $1,000 to eligible workers making $60,000 or less to help ease the "financial burden" from the outbreak.
Citigroup's earnings come a day after JPMorgan Chase and Wells Fargo released their quarterly results. Bank of America and Goldman Sachs reported earlier on Wednesday and traded lower on the back of their results.
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